Is there a diplomatic way to point out to a relative that he is violating HIPPA law by talking about one of his patients, by name, at a party?

It's HIPAA, not HIPPA.

You know the relative, I don't. I wouldn't quote or mention HIPAA but I'd make him aware he "may" have disclosed personal information.

What is your relationship to the patient?

I see no need to be diplomatic, just do it in private. I suppose you can tell a little lie, such as you think you know someone there who knows the patient.